Our Blog

Month: December 2015

Businesses are required by law to keep sufficient records to complete their tax returns accurately. They must also retain certain records for the period prescribed by legislation.

HMRC have the power to carry out checks to ensure businesses are meeting their record-keeping requirements. However, these are being wound down from October 2015 and HMRC will no longer initiate new business records checks. However, they will complete the telephone questionnaire where the initial letter has been sent out and visit the business if necessary.

Guidance on business record checks is available on the gov.uk website at www.gov.uk/record-keeping-checks-on-your-business, and has recently been updated. It covers the procedure followed by HMRC when checking records, the format of a records check visit and the possible outcomes of a visit.

Travel aboard. Where a director or an employee travels abroad on business and incurs accommodation and subsistence costs, your business can reimburse them tax and NI free. Usually, HMRC expects claims to be backed up by receipts etc. However, it applies a concession for travel-related costs paid while overseas.

Approved Allowances. HMRC sets a scale rate of expenses that employers can pay tax and NI free which do not require supporting receipts. The scale rate is different for each country and HMRC updated this list in October 2015. The new rates can be used for overseas trips made since 1 October 2014.

Tip. Even where the actual cost incurred by an employee for an expense, eg. an evening meal or hotel, was less than the scale rate, you can still pay the full amount tax and NI free.